Obesity remains a serious health problem and it is no secret that many people want to lose weight. Behavioral economists typically argue that “nudges” help individuals with various decisionmaking flaws to live longer, healthier, and better lives. In an article in the new issue of Regulation, Michael L. Marlow discusses how nudging by government differs from nudging by markets, and explains why market nudging is the more promising avenue for helping citizens to lose weight.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

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Archives: 06/2011

Featured prominently on the front page of yesterday’s USA Today is Justice Clarence Thomas’s stony visage. The accompanying article by Joan Biskupic purports to be a “look back” at Thomas’s near two decades on the Court. In reality, the article is a thinly veiled hit piece on Thomas’s principled commitment to originalism, his understanding of the proper role of the judiciary, and his belief in the law.

Keying on Thomas’s “hard line” on criminal defendants, the article spends most of the time listing a rogues gallery of Thomas opinions that have been carefully chosen to pull at the heart strings and incense readers unfamiliar with the principles that stand behind Thomas’s positions. The gallery includes:

denying re-sentencing to a convicted drug dealer who had “entered rehabilitation and turned his life around”;

dissenting in a case “involving a Louisiana prisoner who had been shackled and punched by guards as a supervisor looked on”;

dissenting from a “decision against Alabama’s practice of chaining prisoners to outdoor hitching posts and abandoning them for hours without food or water”;

writing the majority opinion in Connick v. Thompson (in which Cato filed a brief supporting the defendant) holding that “a former death row convict could not sue prosecutors who had failed to turn over blood evidence that could have shown his innocence in a separate armed robbery and led him to testify on his behalf in a murder trial”; and

writing separately in the controversial Citizens United case to argue that rules requiring individuals and corporations to disclose their campaign spending violate the First Amendment.

In the wake of such a depressing litany of seeming heartlessness, it’s easy to imagine Justice Thomas cackling like a malevolent super-villain as the world burns around him. No doubt many people think the Court’s conservative wing are little better than black-robed Lex Luthors.

While I certainly don’t agree with every decision of Justice Thomas, including some listed in the article, Biskupic does not even try to account for, with an expert quote or otherwise, why Justice Thomas takes the positions he does.

In 1850, famed French Classical Liberal essayist Frederic Bastiat penned perhaps his most famous piece, That Which is Seen, and That Which is Not Seen. In it he criticizes poor economists who analyze only the immediate, “seen” effects of a policy proposal but ignore the extended, secondary effects that are “not seen.” Bastiat wrote:

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen. The others unfold in succession — they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference — the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.

Bastiat’s wise words can apply equally to those good judges who understand the extended effects of their rulings and those bad judges who ignore those extended effects in order to focus only on that which is seen. Justice Thomas is in the former category. He has always understood that every Supreme Court ruling affects more than just the parties before the Court, no matter how sympathetic and heartbreaking those parties may be.

Take Justice Thomas’s opinion in Connick v. Thompson. The Orleans Parish District Attorney’s office admitted to violating John Thompson’s civil rights when they withheld crucial evidence from his trial. As a result, Mr. Thompson spent 18 years — 14 in solitary confinement — on death row. The district court awarded $15 million to Mr. Thompson, a judgment roughly on par with the operating budget of the office for an entire year.

Mr. Thompson’s situation is heartbreaking. However, his plight is not the only tragic story at stake. There are other stories that we must imagine. As such, they hit us with less immediate emotional force.

The current economic woes of state governments should remind us that the resources of local government are far from inexhaustible. Large judgments, after all, can mean the elimination of vital services. After Hurricane Katrina, it was in New Orleans that the term “misdemeanor murder” was coined, a snarky riposte to the New Orleans District Attorney’s office lacking the resources to investigate all the claims of murder within the statutorily prescribed time limit. Thousands of felons were released due to the failure to prosecute. The murder rate in New Orleans then set a record.

These effects, of course, cannot be directly traced to the judgment granted to Mr. Thompson. Nevertheless, these are possible real-world consequences of large judgments issued against prosecutors for misconduct. The question in Connick was whether the district attorney’s office itself — meaning the government and the taxpayers — must pay for the unlawful actions of one of its prosecutors. Here we tread on dangerous ground. A broad theory of government liability could threaten to open a “floodgate of litigation” across the country and possibly raise murder rates in cities other than New Orleans.

I disagree with Thomas’s opinion in Connick, but I certainly would not characterize his reasoning as heartless or lacking in consideration for a defendant’s plight. We should have empathy for those on both sides — the seen and the unseen — and not just for Mr. Thompson.

Also, we should remember one of the most important, and most forgotten, maxims in legal philosophy: a good law can sometimes produce bad results. Many may blanch at this assertion, may claim that if a bad result comes from a good law then that law can be tweaked at the margins, given exceptions and codicils. But what would result from this ad hoc process of outcome-oriented adjustments would not be a law, but rather a congealed mass of lawyer-ese backed by force. It would likely fail to give adequate notice as to what is illegal (already a huge problem, as I wrote about here) and it would lack one of the sine qua nons of law: generality. Over-particularizing the law — that is, adding in exceptions, balancing tests, and provisos — does not give life and conscience to the law, it threatens to fundamentally undermine it.

And lastly, remember that every wrong does not have an effective legal remedy. Bending the law to ensure that all wrongs are compensated by someone with sufficiently deep pockets will only guarantee that those living under the law are subject to increasingly arbitrary enforcement. This is perhaps the biggest “that which is not seen.”

These words could only be uttered by someone who knows very little about economics or the history of human progress. In fact, they could only be uttered by someone who has never reflected on this question before in his life. Because if you reflect for one moment, you come up with this glaringly obvious counterfactual: we use a lot more labor-saving technology today than in previous generations, and yet we also employ far more people. Therefore, increased automation does not lead to decreased national employment.

If you do more than just think for a second – if you read an economic history book, for instance – you discover that increased automation doesn’t even necessarily lead to decreased employment in the industry being automated! The classic example is the 19th century British textile industry. The so-called “Luddites” smashed automated looms fearing that they would lead to rampant unemployment in their industry. But, as the new technology proliferated, textile industry employment rose. Among other reasons, increased efficiency drastically lowered the prices of textile goods, that shot demand through the roof, and to meet the new demand new workers were required to operate and maintain the new machinery.

There are other examples, of course, and the president will save the American people a great deal of hardship, and himself further embarrassment, if he familiarizes himself with them. Here’s a good brief introduction from the British Secretary of State… under Margaret Thatcher.

Update:

For those having trouble viewing the video, here is a transcript of the relevant Q&A:

Q: Why, at a time of record profits, have you been unable to convince businesses to hire more people Mr. President?

A: [….] the other thing that happened, though, and this goes to the point you were just making: there are some structural issues with our economy, where a lot of businesses have learned to be a lot more efficient with a lot fewer workers. You see it when you go to a bank and there’s an ATM, you don’t go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate.

Long-standing consensus holds that copyright, by creating artificial scarcity in information goods, allows creators to enjoy rewards from their creations sufficient to justify creating them. In other words, copyright’s incentive structure encourages creation and innovation, the end result being more and better information goods for the society to enjoy.

Information technologies such as digitization and the Internet are rejiggering the balance that copyright is supposed to strike and casting doubt on the consensus about copyright in some quarters. Technological change has driven down the cost of producing and distributing many creative works quite dramatically. This improves the profitability offered to creators by copyright’s protections, so maybe less such incentive to create is required. Except that the same technologies also permit copying of works on a quite large scale, which reduces the benefits available to creators.

Copyright violation is utterly rampant today. You probably violate copyright law many times a day (subject to arguable fair use rights) when you forward around emails with jokes, pictures, and videos in them, for example. The copyright violations that “matter,” of course, are the ones that undercut the living of those who have made production and distribution of copyrighted works their business or source of financial support.

A further complication: Copyright may do more than simply encourage new creation. It may impede the development of new works because creators can’t use existing copyrighted works to create more. Artists today can’t stand on the broad shoulders of artists from the 1960s, ’70s, and ’80s. If they are to riff on existing cultural themes, they have to use the shoulders of artists from the 1860s, ’70s, and ’80s, whose works are in the public domain.

This is the thicket into which the committee wades. Happily, it’s holding the copyright consensus up to the light and doing some empirical study of the role that copyright has in innovation. Gathered at a Web site for the project are a series of papers that authors presented at a panel last week, including:

These are but a few of the many subjects that economic study should explore if we are to fully understand the effects of copyright and other intellectual property laws. There’s no time like the present for the studying to begin.

Ruling just a week after hearing oral arguments in the case, the Wisconsin Supreme Court has overturned a lower-court ruling that had struck down the law. Though other challenges are foreseen, the law reining-in collective bargaining powers for public school employees and other state workers is now likely to go into effect – at least for the time being.

Collective bargaining was always a bad idea for workers employed by a state-run monopoly, because it lacks the checks and balances of the private sector. When UPS went on strike, customers could – and did in great numbers – shift their business to FedEx, DHL and others. But taxpayers must keep paying for the public schools despite their rising costs and collapsing productivity.

Still, it is unlikely that this measure will control public school costs as well as many observers hope. I explain why in a feature story I wrote for the current (June) issue of The American Spectator. It’s on newstands now, and should also be up on the Spectator’s website within the next few days. [Hat tip for the breaking news to Bill Evers].

One of the biggest inside-the-Beltway battles continues to be over the nomination of Elizabeth Warren to head the newly created Consumer Financial Protection Bureau. Recently the White House floated the name of Raj Date, one of Ms. Warren’s hand-picked staffers at the CFPB, as a substitute. Many on all sides of the issue continue to wonder why the White House doesn’t just nominate Warren and make Republicans (and not a few Democrats) vote against her. After all she appears to be beloved on the Left.

Perhaps the White House already knew what I had suspected, but only recently confirmed: that Professor Warren is neither as well known or liked as commonly believed. A recent poll in Massachusetts by Democratic pollsters Public Policy Polling, who tend to over-sample Democratic voters, found about as many respondents had a unfavorable view of Warren as favorable, 21% vs.17%. And that’s in left-leaning Massachusetts. I have to imagine the results look even less favorable for Warren in places like Montana (maybe Jon Tester could tell us). Perhaps less surprising is that over 60% had no opinion, probably because they had no idea who she is, and this in a state where she might run for Senate. (I’d probably poll 90% plus not knowing who I was, and I’d like to keep it that way.)

Obviously we shouldn’t read too much into any one poll. But I think this helps remind us that sometimes what Washington cares about does not really matter much to those outside the Beltway.

On October 1, 2009, Montana passed the Montana Firearms Freedom Act, the purpose of which was to regulate guns manufactured and kept within Montana state lines under a less restrictive regulatory regime than federal law provides. That same day, to ensure that Montanans could enjoy the benefits of this less restrictive state regulation, the Montana Shooting Sports Association filed a declaratory judgment claim in federal court.

The lawsuit’s importance is not limited to Montana, as seven other states have passed laws similar to the MFFA and 20 states have introduced such legislation. The goal here is to reinforce state regulatory authority over commerce that is by definition intrastate, to take back some of the ground occupied by modern Commerce Clause jurisprudence.

The district court granted the government’s motion to dismiss, however, and MSSA appealed to the Ninth Circuit. Now on appeal, Cato has joined the Goldwater Institute to file an amicus brief supporting the MSSA and arguing that federal power does not preempt Montana’s ability to exercise its sovereign police powers to facilitate the exercise of individual rights protected by the Second and Ninth Amendments. More specifically, for federal law to trump the MFFA, the government must claim that the Commerce and Necessary and Proper Clauses give it the power to regulate wholly intrastate manufacture, sale, and possession of guns, which MSSA argues is a state-specific market distinct from any related national one.

Our brief argues that federal preemption would violate the “letter and spirit of the Constitution” and that heightened judicial scrutiny is required whenever the federal government invokes an implied power to override state sovereignty. The MFFA should not be preempted because: (1) principles of state sovereignty limit federal power; (2) preemption would violate the federalism framework established in National League of Cities v. Usery; and (3) preemption would not allow state sovereignty to serve its role as a proper check of federal power. The Supreme Court has made clear that Congress is not the sole venue for states and individuals to seek protection from federal overreach and so this case is fundamentally a dispute over federalism—which should allow for state regulation of local matters to flourish in concert with federal power over “truly national” concerns.

Allowing preemption here would have the perverse effect of allowing the federal government to regulate “states as states” while impairing states’ ability to operate in areas of traditional governmental functions. The Ninth Circuit should thus find that district court committed reversible error in dismissing the lawsuit and, as a result, MSSA should be allowed to pursue its case beyond the pleadings stage.

The Ninth Circuit will hear the case of Montana Sports Shooting Association v. Holder in late summer or early fall.

Virginia Republican Gov. Bob McDonnell…says Obamacare is unconstitutional and therefore illegitimate. Yet he has created a state commission to study whether Virginia should implement an illegitimate law. Since the answer does not appear self-evident to commonwealth officials, let’s walk through the reasons Richmond should refuse to create any new health-care bureaucracies.